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It has been about a month since the last earnings report for Navient (NAVI). Shares have added about 1.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Navient due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Navient Q4 Earnings Beat Estimates on Lower Expenses, NII Dips Y/Y
Navient reported fourth-quarter 2024 adjusted earnings per share of 25 cents, surpassing the Zacks Consensus Estimate of 20 cents. It reported earnings of 70 cents in the prior-year quarter.
Results were driven by a rise in other income and lower expenses. A decline in provision for loan losses was another positive. However, a decrease in NII was a headwind.
GAAP net income was $24 million against a net loss of $28 million in the prior-year quarter.
For 2024, adjusted earnings were $2.00 per share, which missed the Zacks Consensus Estimate of $2.41. This compares unfavorably with the $2.45 in 2023. The company reported a GAAP net income of $131 million, which declined 42.5% year over year.
NII & Expenses Decline
NII declined 30.6% year over year to $134 million in the fourth quarter. It missed the Zacks Consensus Estimate of $151.05 million.
In 2024, core NII was down 39.4% from the prior year to $573 million. Also, the top line missed the Zacks Consensus Estimate of $580.8 million.
Total other income increased 41.9% year over year to $88 million. The rise primarily stemmed from a gain on the sale of a subsidiary.
Provision for loan losses was $45 million, down 18.2% from the prior-year quarter.
Total expenses decreased 25.5% year over year to $152 million.
Quarterly Performance of Segments
Federal Education Loans: The segment generated a net income of $10 million, which declined 84.1% year over year.
As of Dec. 31, 2024, the company’s net FFELP loans were $30.6 billion, down 18.6% sequentially.
Consumer Lending: This segment reported a net income of $37 million, which decreased 19.6% from the year-ago quarter.
The private education loan delinquency rate greater than 30 days was 6.1% compared with 5.1% in the prior-year quarter.
As of Dec. 31, 2024, the company’s private education loans were $15.7 billion, which decreased 7% from the prior quarter. Navient originated $322 million of private education refinance loans in the reported quarter.
Business Processing: The company reported a segmental net loss of $20 million against a net income of $8 million in the year-ago quarter.